Corn and starch night market futures prices have fallen sharply

Corn spot prices continue to rise, with stable and moderate increases in the production areas of Northeast and North China, as well as ports in the north and south; The futures price has been fluctuating since morning trading, rising first and then falling later in the afternoon. There have been slight declines throughout the day, while in the evening trading, there has been a significant reduction in holdings and a sharp decline. For corn, the medium-term bullish logic is that the market gradually recognizes the current year's domestic corn production and demand gap, and spot prices need to rise to stimulate imports and substitution to supplement the production and demand gap. The market inventory cycle accordingly enters the active replenishment stage, during which the focus at the spot level is on new supply. Considering that national inventory disposal generally occurs after farmers sell grain, there is currently more attention paid to wheat feed substitution; At the futures price level, more attention is paid to the basis. Currently, it is at a historical low during the same period, and a continuous rise in spot prices is needed to provide positive feedback. In summary, we maintain a cautious bullish view and recommend investors to hold long positions in the early stages.

The overall stability of starch spot prices has been maintained, with some regions lowering their quotes by 20 yuan/ton. The performance of starch futures prices is relatively stronger than that of corn, and the price difference between starch and corn has slightly widened. For starch, the price difference between starch and corn has recently expanded slightly due to the recent month basis difference, but its expansion space is also constrained by industry supply and demand. At the same time, considering that the rise in by-products may be difficult to sustain, and the production profit of the market is meager, the price difference between starch and corn may be in a dilemma in the short term or up and down. However, starch is expected to follow the trend of raw material corn unilaterally. Overall, we hold a cautious bullish view and recommend holding long positions in the early stages. It is advisable to wait and see for the starch corn price arbitrage.